By Brian Gorman
LONDON, March 19 (Reuters) - European shares were up at midday on Friday, and had hit a 17-month high led by banks, after Lloyds Banking Group said it would return to profitability in 2010.
At 1149 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.4 percent at 1,074.32 points, having earlier reached 1,076.29, the highest since October 2008.
The European benchmark is up more than 66 percent from its lifetime low reached on March 9, 2009.
The heavyweight banking sector added most points to the index. Lloyds surged 8.9 percent after the lender, in which the UK government has a 41 percent stake, said it would swing back to profit this year following two years of heavy losses, helped by lower bad debts and tight cost controls.
Royal Bank of Scotland, 84 percent state-owned, rose 6 percent.
Other banks to rise included BNP Paribas, Barclays , Deutsche Bank, Societe Generale and UBS, up between 1.4 and 2.4 percent.
'The Lloyds news was surprising and it's had quite an impact,' said Colin McLean, managing director at Scottish Value Management in Edinburgh.
He added: 'There had been some bearishness on it, and we've probably seen closing out of short positions in the financial sector. There is the potential for the market to move higher. Some of the defensives are weak.'
A fall for crude futures to below $82 a barrel, as the dollar strengthened, did not prevent the energy sector being included in the market's gains.
BP, BG and StatoilHydro rose between 0.7 and 0.9 percent.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 advanced between 0.2 and 0.6 percent.
INVESTEC RISES
Investment bank and asset manager Investec rose 2.4 percent, and hit a 12-month high, following an upbeat trading statement on Thursday. The company joins Britain's FTSE 100 index on Monday.
It was further helped by Deutsche Bank raising its price target to 550 pence, from 500.
Among other individual risers, Swatch Group added 1.9 percent. The world's largest watchmaker is aiming for full-year sales of more than 6 billion Swiss francs after seeing a 30 percent sales jump in January and February, its chairman was quoted as saying in an interview.
Concerns over Greece's debt problems persisted on Friday, pressuring the euro as traders waited to see if Athens can secure aid from euro zone members at a summit next week.
The country raised the stakes on Thursday in its quest for EU help to tackle its debt crisis, saying it cannot achieve promised deficit cuts if its borrowing costs remain so high and may have to call in the IMF.
Labour market and consumer prices data on Thursday showed the U.S. economy is on a moderate growth path and inflation pressures are contained, backing up the Federal Reserve's vow to keep benchmark interest rates ultra-low for some time.
(Editing by Mike Nesbit) Keywords: MARKETS EUROPE STOCKS (brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters Messaging: brian.gorman.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, March 19 (Reuters) - European shares were up at midday on Friday, and had hit a 17-month high led by banks, after Lloyds Banking Group said it would return to profitability in 2010.
At 1149 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.4 percent at 1,074.32 points, having earlier reached 1,076.29, the highest since October 2008.
The European benchmark is up more than 66 percent from its lifetime low reached on March 9, 2009.
The heavyweight banking sector added most points to the index. Lloyds surged 8.9 percent after the lender, in which the UK government has a 41 percent stake, said it would swing back to profit this year following two years of heavy losses, helped by lower bad debts and tight cost controls.
Royal Bank of Scotland, 84 percent state-owned, rose 6 percent.
Other banks to rise included BNP Paribas, Barclays , Deutsche Bank, Societe Generale and UBS, up between 1.4 and 2.4 percent.
'The Lloyds news was surprising and it's had quite an impact,' said Colin McLean, managing director at Scottish Value Management in Edinburgh.
He added: 'There had been some bearishness on it, and we've probably seen closing out of short positions in the financial sector. There is the potential for the market to move higher. Some of the defensives are weak.'
A fall for crude futures to below $82 a barrel, as the dollar strengthened, did not prevent the energy sector being included in the market's gains.
BP, BG and StatoilHydro rose between 0.7 and 0.9 percent.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 advanced between 0.2 and 0.6 percent.
INVESTEC RISES
Investment bank and asset manager Investec rose 2.4 percent, and hit a 12-month high, following an upbeat trading statement on Thursday. The company joins Britain's FTSE 100 index on Monday.
It was further helped by Deutsche Bank raising its price target to 550 pence, from 500.
Among other individual risers, Swatch Group added 1.9 percent. The world's largest watchmaker is aiming for full-year sales of more than 6 billion Swiss francs after seeing a 30 percent sales jump in January and February, its chairman was quoted as saying in an interview.
Concerns over Greece's debt problems persisted on Friday, pressuring the euro as traders waited to see if Athens can secure aid from euro zone members at a summit next week.
The country raised the stakes on Thursday in its quest for EU help to tackle its debt crisis, saying it cannot achieve promised deficit cuts if its borrowing costs remain so high and may have to call in the IMF.
Labour market and consumer prices data on Thursday showed the U.S. economy is on a moderate growth path and inflation pressures are contained, backing up the Federal Reserve's vow to keep benchmark interest rates ultra-low for some time.
(Editing by Mike Nesbit) Keywords: MARKETS EUROPE STOCKS (brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters Messaging: brian.gorman.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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